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'The Rachel Maddow Show' for Tuesday, November 24, 2009

Read the transcript to the Tuesday show

Guests: Jack Jacobs, Lisa Myers, Sen. Bernie Sanders, Rep. Anthony Weiner, Eliot Spitzer, Chris Kofinis

HOWARD DEAN, GUEST HOST:  Thanks, Keith.

And thank you for staying with us for our next hour.  Rachel is continuing her well-deserved vacation time.

We begin tonight with the most important part of health care reform, now on life support.

Tonight, a small group of senators in the Democratic Caucus are reaffirming their commitment to killing the Senate health care reform bill, if it includes a public option.  The most vocal among them is Senator Joe Lieberman, of Connecticut, who is now repeating his threat to block any bill that includes any version of a public option.

With the Senate now less than a week away from debating health care reform, Democratic majority leader, Harry Reid, now has a choice, stand firm on the public option or compromise it to get something passed.  Those on the compromise side argue that we should just let the bill pass without a public option so we can get all of the good insurance reform that‘s in the bill.  But, there‘s a dirty little secret about this—the insurance reform is gone.

In order to have insurance reform, you need two things.  The first is making sure insurance companies can‘t turn you down for any medical reason.  That‘s called guaranteed issue—and that‘s in the bill.  But that‘s only effective if you make sure that the coverage is affordable.  And that‘s not in the bill.

As the bill is written now, the insurance companies will still be allowed to gouge their customers if they have illnesses to charge you two or three times what your neighbor gets charged.

A lot of the insurance reform in this bill is gone.  The only real reform that‘s left is the public option.  If that‘s compromised away, this bill is no longer health care reform.  It‘s just a huge gift to the health insurance industry from the same people who bailed AIG out, the American taxpayers.

Instead of ruining the bill by taking out the public option, why not just do the fair thing?  If there are four senators who won‘t let us pass the bill with a public option, we have a mechanism to pass it, anyway—through the budget reconciliation process.

If you do that, you only need 51 votes to pass it, which exist in the Senate, instead of 60, just a simple majority.  That‘s how most democracies work.  That‘s what we should have done in the beginning.  And that‘s what Democrats ought to do right now.

Joining us now is independent Senator Bernie Sanders of Vermont.  He‘s a member of the Senate Health, Education, Labor and Pensions Committee.

Senator Sanders, thanks for joining us tonight.

SEN. BERNIE SANDERS (I), VERMONT:  Good to be with you, Howard.

DEAN:  It seems clear to me that if these four senators are to be believed, the Senate can‘t pass a strong public option.  So, I guess, I‘m going to first ask you, would you support the use of reconciliation to fix this?

SANDERS:  Absolutely.  That is one of the real options that we have.

Look, the facts are clear.  The overwhelming majority of the American people want a public option.  They want a choice other than a private health insurance company whose function in life is to rip them off and to make as much money as possible.  The president wants it.  The House of Representatives want that.  The majority of the Senate wants it.

And I think it is wrong it took a handful of conservative Democrats and all of the Republicans are stopping that.  So, reconciliation is certainly one opportunity and vehicle that we have.

DEAN:  Bernie, you said this week that you would not vote for a bill that doesn‘t have a strong public option.  Are there other Democratic senators who would join you in voting against a bill without a real public option?

SANDERS:  I believe that there are.  And it‘s important that we do this, Howard, because, I think, you‘ve made this point.  If you do not provide competition to the private insurance companies, what is going to stop them from raising their rates outrageously and costing the federal government huge sums of money?  What mechanism is in this bill for cost-containment?  And I don‘t see it, frankly.

So, I think, we have to got remain strong for a public option, go to a reconciliation method, that‘s another way, or maybe scale down what we are trying to do and see if we can get 60 votes.  And that would mean a significant expansion of Medicaid, a real focus on primary health care and the growth of community health centers and primary health care doctors.  We can do prescription drug reform; stop the situation where we are paying the highest prices in the world for prescription drugs, the re-importation; negotiating with the drug companies on Medicare Part D; and insurance reform as well.

So, maybe we can get a consensus at 60 votes for a scaled down approach.

DEAN:  In terms of insurance reform, specifically the bill, the current bill still allows insurance companies to gouge their customers charging them up to 300 percent more than their neighbor is charged.  As you know in Vermont, we limit that to 20 percent above the cheapest rate, and that really works.

Is that going to be the kind of thing that could be addressed during the amendment process?  And what do you know about that?

SANDERS:  Absolutely.  It is one of the things that should be addressed.  It‘s just not fair.

What you‘re saying is, yes, you could prohibit—you can prohibit pre-existing conditions, but rates can be risen substantially and people would not be able to afford the insurance in any case.  That is obviously an issue that should be dealt with.  We‘re going to be introducing at least a dozen amendments myself and I think many other senators will have their amendments.

DEAN:  So, Bernie, the Democratic Caucus has two independent senators in it, you and Joe Lieberman.  Do you think you can convince your fellow independent that he ought to be supporting a real public option and real health care reform?

SANDERS:  Probably not.  I think that responsibility will rest with Senator Reid and millions of Americans who want real health care reform.

DEAN:  Senate Republicans have vowed to launch what they call a “holy war” on health care reform.  They have already promised to use every delaying tactic in the book, which is a very long book, of Senate rules.

How do you stop them from watering the bill down any further?  And how can we get a real bill out after we‘ve come so far?  This is the farthest we‘ve come in 60 years.

SANDERS:  Well, Howard, you know, I think it is really an outrage.  After eight years of Bush, where nothing was done while health care was deteriorating in America, 70 million lost their health insurance.  Premiums almost doubled under Bush‘s years—Bush‘s eight years.  They did virtually nothing, nothing.

And now that Obama and some of us are trying to do something, the best they can do is play the obstructionist role and trying to kill this bill.  That‘s wrong.  And it‘s really a sad day for America.  They should join us for real cost-effective, universal, comprehensive health care.  And it‘s a sad day for our democracy when these guys are AWOL on this important issue.

DEAN:  If I were you, on your end of this question, I might not answer, but I‘m going to answer it anyway.  Give a percentage.  How optimistic are you that we are actually going to get a real health care bill with real public option through the Senate, through the House and signed by the president?

SANDERS:  I don‘t know what—you know, if it will be scaled down or what.  I think something will be passed.  My view is it is better to have something that is strong and good and cost-effective than a bailout to the tune of hundreds and hundreds of billions of dollars to the private insurance companies who could raise their rates at any point.

So, at the end of the day, do I think we‘ll have something?  Yes, I do.  What it will be?  Too early to say.

DEAN:  Independent Senator Bernie Sanders from Vermont, thank you so much for your time.

SANDERS:  Good to be with you, Howard.

DEAN:  After all the talk about a public option, what happens if the Senate ends up with a bill that does not a robust public option?  Will progressive members of Congress still vote for it and call that reform?  We‘re going to ask now one of the leading progressives in the House, New York Congressman Anthony Weiner.  That‘s next.

(COMMERCIAL BREAK)

DEAN:  An update tonight on a story followed closely on THE RACHEL MADDOW SHOW.  Bill Sparkman, a 51-year-old part-time Census worker was found dead in the Daniel Boone National Forest on September 12th.  He was hanging from a tree, naked, bound with duct tape, with the word “fed” scribbled on his chest.

Kentucky State Police today concluded that his death was a suicide.  According to police, Sparkman, who was battling cancer, staged the elaborate crime scene in a county that he felt had negative views towards the government to make it look like a homicide.  Authorities also say that within the past year, Sparkman took out two life insurance policies totally $600,000, both of which did not cover suicides.

We‘ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  Insurance companies are out there in full force, carpet bombing, shock-and-awe against a public option—so much so that when you ask people about the plan, they are uncertain about it until you tell them what is in it.

(END VIDEO CLIP)

DEAN:  For months, top Democrats have hammered the insurance industry for its multimillion dollar full-court press to stop health care reform.

Now, as House Democrats wait on their Senate colleagues to pass a health care reform bill, they are looking on as a centerpiece of reform, the public option hangs in the balance.  Thanks to largely to the insurance industry opposition.

Senate Democrats are divided.  The caucus pits those who threatened to kill the bill and refuse to bring it up if it has the public option in it against Democrats who say they‘ll vote against a bill that further weakens the public option.

So, will it survive the Senate?  And if it does not, what does that mean for its prospects in the House?

Joining me now is Democratic Congressman Anthony Weiner of New York.

Congressman Weiner, thank you for joining us.

REP. ANTHONY WEINER (D), NEW YORK:  Thanks for having me.  Appreciate it.

DEAN:  So, are liberals in the House willing to kill this bill if it doesn‘t have a real public option?  Not a fake public option like a trigger or an opt-in, or one of those kinds of things, but a real, strong public option.

WEINER:  Well, one of the things to keep in mind here is that many of us have already compromised a long way.

DEAN:  Yes.

WEINER:  People like me wanted to have a single-payer system, Medicare for all Americans.  We compromised to a strong public option for a very small number of people, the people in the exchange.  We‘re probably close to negotiating away too much for progressives in the House.  But, frankly, most people, you know, the thing that‘s most complicated to all of us is we listen to our colleagues in the Senate say it doesn‘t save enough money.  And then the one tool that we have, or one of the tools, the public option, they say we want that out of there, too.

The problem with these negotiations is we do have a small group of Democrats who are arguing, essentially, an inconsistent thing.  They want a lower cost, which the public option can provide, but they don‘t want the public option.

DEAN:  So, how did we sink to this incredibly low point in this debate where there‘s not even any mention of the single-payer system?  Even though about 50 million Americans are already in a single-payer system.  It‘s called Medicare for people over 65.  And another 25 million Americans are in a socialized government-run health care system called the Veterans Administration, which also happens to be the most highly-rated of all the health care systems in the country, both private and public.

How did we get to this point?

WEINER:  Well, not to mention the Department of Defense which is also.

DEAN:  Right.

WEINER:  . a single-payer government and the Bureau of Indian Affairs. 

We do it a lot of cases.

DEAN:  Not to mention the 535 congressmen who have sort of hybrid system.

WEINER:  Well, we have a hybrid system.

DEAN:  Yes.

WEINER:  We have essentially our own public option, many of us, because we‘re on Medicare.

DEAN:  Right.

WEINER:  I mean, not myself but there are a lot of members.  I did a survey and checked every -- 150 members of the House and Senate are on a public option Medicare.

But here‘s a personal—let‘s not get too carried away with this whole notion how sunk—how far we sunk.  It‘s still a good bill.

(CROSSTALK)

DEAN:  The House bill is great.

WEINER:  Well, look—well, great.  I mean, it, too, is a compromise for many of us.

DEAN:  But very solid.

WEINER:  Yes, but the—and the Senate bill, I think, still, and we have a conference to get to.  Look, one of the things that I‘ve argued all along, is that if we knew what people like Senator Lieberman or Senator Landrieu or Senator Lincoln, if they said, “Look, here are the things we want, we want cost-savings,” we can give them cost-savings.  We can have a stronger public option which negotiates the hold-down prices.  Maybe do what Ron Wyden wants, which is like everyone going to the public option.

DEAN:  Yes, I think that‘s a great bill.

(CROSSTALK)

WEINER:  We can take something like the Medicare system, which has a 1.5 percent overhead and expand it to more Americans.  We can do cost savings.

But we have to know what they want, and between the public option getting watered-down and the Stupak Amendment of attacking the rights of women, and by the way, putting government bureaucrats between people and their doctor, if those things stay intact, I don‘t think this has the votes to pass the House and that‘s regrettable because there are a lot of things to do that we all agree on.

DEAN:  What about the Bernie Sanders‘ idea that he was talking about earlier, which is, if you can‘t pass this thing, don‘t try to reform the whole system, expand Medicaid, put in some money for federally-qualified health care centers and those kind of things.

WEINER:  You know, I don‘t buy—and Bernie is great—but I don‘t buy the idea that we‘re transforming health care with this.  I kind of wish we were.  For the most part, the president is right, a lot of people are going to keep the insurance that they have, we‘re going to add some new standards and we‘re going to give some tax credits to people to buy insurance.

But what we really should be thinking about doing is taking something that works.  And, by the way, is a bedrock Democratic program, the Medicare program and expanding to more Americans.  Everyone understands Medicare because their parent or grandparent is on it and they like it.

DEAN:  Right.

WEINER:  We‘ve made some strategic mistakes, I believe.  All that being said of where we are is, that if we Democrats think we‘re going to stand for reelection in 2010, having a watered-down public option or none, and having the Stupak language in there, we‘re going to find we might be doing more harm than good to our brand.

DEAN:  Well, that‘s what I want to ask about, that would be the last question for me.  More harm than good.  At what point is this bill not worth passing?

WEINER:  Well, it‘s interesting.

DEAN:  And are you going to have the votes to make sure that to make that statement?

WEINER:  It‘s a good question.  I have this Web site, CountdownToHealthcare.com where I let people kind of weigh in each day.  It started out focusing on Republicans.  Now, it‘s focusing entirely on Democrats.

We have to realize we‘re getting very close to a point that we were in the summer, where the American people desperately want us to fight back and stand for principle and we‘re not doing it.  I‘m convinced that Senator Reid and Chuck Schumer and Ron Wyden, and people like Bernie Sanders are going to do—are going to finally bring around those recalcitrant senators.

But if we keep watering this down much further, we‘re getting close to that point.  But we don‘t want to let the enemy of the good.  But it‘s got to at least be the good at the end of the day.

DEAN:  And at some point, this is just, as Ross Perot once said, a giant sucking sound puling American taxpayer money into the insurance companies and we don‘t get anything for it.

WEINER:  Well, there‘s three things we needed to do: provide insurance to people that didn‘t have it, provide better care for people that have insurance.

But that third thing, cost savings, the public option is how you do that.  And we‘re starting to increasingly think that by throwing that overboard we‘re going to pass the bill.  That‘s a bad calculation to make.  We need the public option.

DEAN:  Congressman Anthony Weiner, thanks so much for taking the time.

WEINER:  Thank you.  Appreciate it.

DEAN:  Appreciate it.

WEINER:  My pleasure.

DEAN:  If you want to know more about my view on health care reform, pick up my new book, “Howard Dean‘s Prescription for Real Health Reform.”  You can also get it online through the Progressive Book Club.

Big news out of Washington tonight, we‘re learning that President Obama has reportedly made his decision to send more troops to Afghanistan.

Retired colonel and Medal of Honor winner, Jack Jacobs, joins us next to look at the numbers and the plan.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  After eight years, some of those years in which we did not have, I think, either the resources of strategy to get the job done, it is my intention to finish the job.

(END VIDEO CLIP)

DEAN:  The job, in this case, is the war in Afghanistan.  And President Obama has reportedly reached a decision in how he plans to finish it.  The president held a final Afghanistan strategy meeting with his national security team in the Situation Room last night.

And now, MSNBC or NBC News is reporting on the details about the president‘s plan.  It reportedly will call for an increase of 32,000 to 34,000 additional U.S. troops.  And it will reportedly include benchmarks and goals for withdrawal, but not a specific timetable for pulling U.S.  troops out of the country.

The troop number appears to be close to the 40,000 reported by—or excuse me—requested by General Stanley McChrystal, the U.S. and NATO commander in Afghanistan.

President Obama is expected to announce the new plan in an address to the nation next week.

(BEGIN VIDEO CLIP)

OBAMA:  And, I feel very confident that when the American people hear a clear rationale for what we‘re doing there and how we intend to achieve our goals, that they will be supportive.

(END VIDEO CLIP)

DEAN:  A decision comes after a lengthy and contentious deliberation, which included General Karl Eikenberry, the U.S. ambassador to Afghanistan who used to be the top U.S. commander, reportedly cautioning the president against sending more troops.  It appears tonight that thousands more Americans will, in fact, be headed to Afghanistan.

Joining us now is MSNBC military analyst, Colonel Jack Jacobs.  He interviewed General David Petraeus, chief of the United States Central Command for next week‘s issue of “Parade” magazine.

Colonel Jacobs, thanks so much for being here.

COL. JACK JACOBS, RET., MSNBC MILITARY ANALYST:  Well, thanks for having me.

DEAN:  The president‘s plan sending 34,000 more troops to Afghanistan is generally seen as a middle ground decision.  Is that how you‘d characterize it?

JACOBS:  Yes, I think so.  I think, if General McChrystal has his way, he‘d like to have lots more.  I don‘t think any general wants fewer troops.  He wants as many as he can lay his hands on.

Thirty-four thousands looks like it‘s about four combat brigades, all the support that‘s necessary to take care of it in the region, some Special Forces and Special Operations Forces, some intelligence forces.  That ought to bring you up to about the number that we‘re talking about.  And it‘s a middle ground and it permits him to not overload the zone, not stretch forces.  I mean, they are thinly stretched, but stretched them too thinly, and focus his attention on the areas that needed attention in Afghanistan.

DEAN:  The White House has indicated this strategy review isn‘t just about how many troops to send, it‘s also about how long they should stay, how we should got about getting them out.  Do you think the debate over troop levels has overshadowed the debate about the strategy in Afghanistan?

JACOBS:  Oh, I think so.  Everybody has been talking about the numbers from the very beginning.  And I think numbers are far less important than what kinds of troops they and what they‘re going to be doing.

I recall back in the days when the surge, we had the surge in Iraq, everybody was talking about the surge.  We had between 100,000 and 200,000 troops already there.  A surge of 27, 000 troops was nothing.

What really made a difference is that the fact that we sent them into areas, Fallujah for example, and kept them there.  And that‘s what made the difference.

Here in Afghanistan, that‘s also what will make the difference, not the numbers of troops, but what we‘re going to do with them.  That‘s the most important thing.

DEAN:  How detailed do you think the president‘s speech is going to be next week to talk—talking about the strategy, which is where I think Americans are really going to start to focus on now that we‘re sending 34,000 more troops.

JACOBS:  I think he‘s—the instructions that are inside the Defense Department and General Petraeus has given to his subordinates and that the secretary of defense gave to General Petraeus is going to be very, very detailed.  The study that went into this is also very detailed.

But I think the president is going to try to be as general as possible.  And I think he‘s going to be trying to influence public opinion to the following extent.  “I‘ve made a decision.  I know the strategy I want to pursue.  It‘s going to be this, and that is to focus on specific areas.

We are going to keep troops there as long as necessary in order to be successful.  But I don‘t think he‘s going to get any more detailed than that because that just leaves him open to criticism.

DEAN:  As you are well aware and I think most Americans are aware, the polling that shows the support for the war in Afghanistan is dropping below 50 percent.  Mid-term elections are coming up.  The president is going to have a hard time.

Was he going to have a hard time getting Congress to supply the money for this?

JACOBS:  Well, that was a very interesting question.  At the end of the day, and most people who don‘t read the Constitution don‘t realize that Article I of the Constitution is not the president of the United States.  It‘s all about the Congress.  And the president doesn‘t have very many enumerated powers.  The Congress has all the enumerated powers.

In the end, it‘s up to the Congress, whether or not instructions from the president actually get carried out because they‘re the guys who funded.  Remember Guantanamo Bay?  The president said, “Well, we are going to close it.”  Well, the Congress said, “Well, we‘re not going to appropriate the $80 million to start to do it.  So, we‘re not closing.”

This is the same sort of thing.  But remember, that Congress is very, very reluctant to come down hard on any efforts that revolve around national security.  We went through more than a decade in Vietnam and one of the reasons we did is because that Congress just absolutely refused to shut down the pipeline of money.

I think this is the same case, the same situation.  Congress is not really happy about doing this.  The public is not really happy about having to go through this again.  We‘ve been there eight years.  We may have to go through it another decade.

But, in the end, they—Congress does not want to be the body that says to the American public, “No, we‘re not going to defend you because we‘re not allocating the money.”  Now, I think, he‘s—the Congress is going to give the president some time and they‘re going to give him the money that he needs, that he‘s going to request in order to get this done.

DEAN:  Colonel Jack Jacobs, thanks for being with us.

JACOBS:  Well, thanks for having me.

DEAN:  Appreciate it.  Thank you.

JACOBS:  Good to see you.

DEAN:  New questions tonight over Wall Street and big bonuses.  A new report says that the top executives at two of the firms that helped lead to the banking crisis, Lehman Brothers and Bear Sterns, walked away with millions of dollars before the firms collapsed.  Former New York Governor Eliot Spitzer is going to be here to explain how it happened and how it can be stopped from happening again.  That‘s next.

Stay with us.

(COMMERCIAL BREAK)

DEAN:  It turns out that you can do pretty well for yourself being a top executive at a failed bank.  A new report reveals executives at two of the firms that figured prominently in the financial meltdown, Lehman Brothers and Bear Stearns, walked away with huge pay offs before the collapse. 

NBC‘s senior investigative correspondent, Lisa Myers reports. 

(BEGIN VIDEOTAPE)

LISA MYERS, NBC SENIOR INVESTIGATIVE CORRESPONDENT:  It was the early phase of the financial meltdown last year.  First, Bear Stearns was sold to avoid collapse.  Then, Lehman Brothers went bankrupt.  Shareholders lost billions and thousands of employees lost jobs. 

But a new study by experts at Harvard Law School titled “Wages of Failure” found that since 2000, the top five executives at each firm had received staggering amounts of cash bonuses and had sold mountains of stock.  Bear Stearns executives cashed out $1.4 billion and Lehman Brothers, $1 billion. 

NELL MINOW, COMPENSATION EXPERT:  People who invested in these companies should feel betrayed.  The whole idea of capitalism is that the people provide the capital and executives take care of it for us.  In this case, people provided their capital and the executives took it. 

MYERS:  The study found that when the firms collapsed, but Bear Stearns CEO James Cayne and Lehman CEO Richard Fuld lost about $900 million worth of stock.  But the studies said they still came out well ahead overall.  Cayne walked away with $388 million and Fuld, $541 million. 

MINOW:  They were rewarded hundreds of millions of dollars.  And they got that reward for making catastrophic decisions. 

MYERS:  Last year, Cayne bought two condominiums here, at the iconic Plaza Hotel in New York City.  Price tag, $28 million.  Fuld also remains a wealthy man.  He has an $8 million estate in Greenwich, Connecticut, sold his Park Avenue apartment in New York for $26 million this summer and has a $14 million ocean front estate in Florida which he sold to his wife for $100 earlier this year. 

Shareholders are suing executives of both firms.  Gerald Silk represents former Lehman shareholders who claim executives weren‘t truthful about the firm‘s financial condition. 

GERALD SILK, ATTORNEY BERNSTEIN, LITOWITZ, BERGER AND GROSSMANN: 

Lehman crashed and shareholders lost billions of dollars when Dick Fuld and others walked away personally very, very wealthy. 

(END VIDEO CLIP)

DEAN:  NBC‘s Lisa Myers in Washington.  The study‘s conclusion pushes for tougher pay oversight.  And an important detail to know - one of the report‘s authors is an advisor to President Obama‘s pay czar, Kenneth Feinberg.  Mr. Feinberg recently instituted some fairly tough salary restrictions for the CEOs whose companies received federal bailout money. 

But according to the “Wall Street Journal,” Feinberg is facing

enormous pressure from unnamed federal officials to relax executive pay

restrictions at American International Group, another institution that is

80 percent owned now by American taxpayers.  Is this is case of more things

·         the more things change, the more they stay the same? 

Joining us now, former attorney general and governor of the State of New York, Eliot Spitzer who has an article on the AIG report on “Slate.com” today.  Thank you for coming on the show tonight, Eliot Spitzer. 

FMR. GOV. ELIOT SPITZER (D-NY), FORMER ATTORNEY GENERAL:  Governor, great to see you.  Thank you.

DEAN:  Good to see you.  Kenneth Feinberg, the pay czar - is he going to back down on these pay cuts for AIG? 

SPITZER:  I certainly hope not.  I understand that he‘s getting pressure from two sides.  One, the folks at AIG who are saying, “If you cut our pay, people will leave.”  And on the other side, from the Treasury Department saying, “We don‘t want the people to leave.” 

You know, there‘s an old saying - I think it was De Gaulle who said, “The graveyards are filled with indispensable men.”  The AIG folks who are saying, “We are indispensable” - test them.

I think it‘s time to call their bluff and say to them, “You want to leave?  Go away.  We will replace you at one-third the pay.”  The entire structure of Wall Street pay as Nell Minow said, is out of control.  Their fiduciaries - they are working for shareholders, not trying to police the pockets of shareholders.  There‘s a confusion there. 

DEAN:  AIG is now slated to pay another $200 million with the bonuses in March.  And what do you think is going to happen with that?  Should that be paid?

SPITZER:  Well, here‘s the problem.  Some of those now are contractually because these contracts were agreed to and signed off on by many people in the Treasury and others, some of whom made a big fuss about it even though they have been told and signed off on it. 

What we need to do is go back, dig deeper and reconstruct the entire pay structure on Wall Street.  Salaries should be cut.  Bonuses should be cut. 

There should not be these options that survive even in the default context where the shares weren‘t driven to zero, so when the shares come back, there‘s still value there.  Executives should be held accountable and should remember they work for shareholders. 

DEAN:  And now, this is a question I‘ve always wanted to ask an attorney and especially a prosecuting attorney. 

SPITZER:  Right. 

DEAN:  I really don‘t know what the answer is, but a lot of Americans have really been hurt by this.  And their pensions have really been cut by huge numbers.  They are not going to come back. 

So I think a lot of Americans are wondering why some of these people aren‘t in jail.  And why aren‘t they in jail? 

SPITZER:  Well, some of them should be.  Some of them should be but -

DEAN:  Explain what they did, because I don‘t - I mean, people just think they took money, but don‘t know why they are not being prosecuted. 

SPITZER:  Sure.  To a great extent, what happened was that over - and this is not going to lead anybody into a jail cell.  But what happened is that compensation committees, boards of directors got together and agreed that they would pay themselves more and more and more over time. 

And so all of Wall Street started digging in deeper and deeper and take money that should have been shareholder money.  That‘s our money because you, I, many others own mutual funds or invested in mutual funds. 

We own these companies and we, as shareholders, never pushed back when the executives got together and took more and more.  But now, some of them are partnerships.  That‘s different.  They need these companies.  They were taking shareholder money and the wages they were paying themselves was simply extravagant, unwarranted, unjustified. 

Shareholders have to stand-up and say, “Enough.”  Now, in terms of criminal conduct, many of them were simply misleading the public and shareholders about what the risks were and what their portfolios were and what they were worth.  And those were instances.  There will be many of them, but some where you can actually take criminal action.

DEAN:  You sometimes made the cases.  It‘s not so much that we need new regulations on Wall Street since the ones we have had have not been enforced ...

SPITZER:  Absolutely. 

DEAN:  ... at all.  But I want to ask you about what you just said about shareholders.  There‘s been a culture for years, and I, you know, as the small shareholder myself - you see these proxy statements.  They tell you, you have to vote with management. 

I mean, there‘s no culture in this country that shareholders have any rights at all.  Don‘t we need to change that somehow? 

SPITZER:  Absolutely.  And one way to do it, and I have been frankly quite disappointed in the elected controllers of states and cities across the nation, because they are fiduciaries.  They are the representatives of taxpayers and shareholders. 

They could stand-up and say, “We are voting our shares to change the structure, both governing and pay scale.  We could also do it through the mutual funds, through the pension funds. 

So there are many what we call institutional shareholders who should have stood up over time.  And you know, forget looking backwards.  And moving forward, they should do it now. 

Nell Minow talked about how executives have been taking too much.  Shareholders should be the ones who make that point.  That would change the culture immediately.  They could do it. 

Do we need more government rules?  Some would help.  But the reality is the government regulators (UNINTELLIGIBLE).  Tim Geithner, when he was at the New York Fed, could have stopped all this, should have stopped this.  He didn‘t. 

DEAN:  You just wrote an article today.  It‘s pretty tough about Treasury Secretary Tim Geithner - you called “Geithner‘s Disgrace.”

(CROSSTALK) 

SPITZER:  That was the headline.  But the argument here is that when AIG was bailed out, tens of billions of dollars were given to the counter parties - Goldman Sachs, UBS, the major banks, 100 cents on the dollar for the CDS positions they had. 

Not to get technical, they were given everything.  And Tim Geithner and the Treasury Department and fed did not even negotiate with them.  And there is no justification.  This was a giveaway of tens of billions of dollars to the very banks that is got us in this pickle in the first place. 

And the problem we have is that we have a Treasury Department that seems unwilling to negotiate on behalf of the taxpayer to demand of Wall Street the fundamental changes and behavior that we needed. 

Wall Street is still not lending to the mid-sized - these small companies that will create the jobs that we need to come back.  What Wall Street has been doing and given permission to do is use that money for proprietary trading, to give it away to themselves in bonuses and even to invest it overseas. 

Now, with tax dollars, that‘s not what they should be doing.  And so, there has been no other side to the bargain.  Yes, we bailed them out and that needed to be done.  But as I have said since the very beginning, the question is, do we insist upon something back from them?  And unfortunately, the answer has been no. 

DEAN:  Former New York Governor Eliot Spitzer, thanks for coming. 

SPITZER:  Thank you.

DEAN:  I appreciate it.  I have a lot of professional respect for the challenges facing the Republican National Committee.  But I‘m not sure that I would give an ideological purity test to separate the real Republicans from the fake Republicans.  The latest adventures of the RNC are coming up.

(COMMERCIAL BREAK)

DEAN:  The Republican National Committee must have a litmus test for candidates before it will support them to make sure they are conservative enough.  More on that, coming up. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DEDE SCOZZAFAVA, FORMER REPUBLICAN NOMINEE FOR THE U.S. HOUSE OF

REPRESENTATIVES:  Any party that just tries to purge members that might have any sort of independent thinking I think eventually will run itself into very much of a minority status. 

(END VIDEO CLIP)

DEAN:  That was Republican Dede Scozzafava speaking with Rachel after falling victim to an ideological purge in her New York congressional race this year, a purge that is now reaching into the heart of the Republican Party. 

Ten members of the Republican National Committee are distributing a purity principle proposal to be voted on by party members early next year.  Among its premises are, quote, “Republican solidarity in opposition to Obama‘s socialist agenda and President Reagan‘s belief that someone who agreed with him eight out of 10 times was his friend, not his opponent.” 

The resolution proposes that in order to qualify for funding from the Republican National Committee, candidates must sign on to no fewer than eight of the 10 principles, including things like opposing climate change legislation, opposition gun control, opposing immigration reform, opposing gay marriage and supporting lower taxes. 

A litmus test that, as Keith has pointed out on “COUNTDOWN,” not even Ronald Reagan himself would have passed.  Big tent meet pup tent. 

Joining us now is Democratic strategist, Chris Kofinis.  Chris, thanks very much for us having on.

CHRIS KOFINIS, DEMOCRATIC STRATEGIST:  Good evening.

DEAN:  I mean, for having you on.  I‘m so used to being the guest here.  Back in the spring, Michael Steele denied that Rush Limbaugh was the de facto leader of the Republican Party.  He called Limbaugh‘s language incendiary. 

And of course, he apologized the next day.  Now, we have the party considering adopting a resolution that calls Obama‘s agenda socialist.  What changed between the Michael Steele then and the Michael Steele now? 

KOFINIS:  Well, I think, to put it bluntly, they are terrified of their grassroots.  And I think what their misunderstanding is the grassroots are leading them down a path that‘s going to make them more and more unelectable. 

I mean, you cannot have a party that has a litmus test that does not reflect either the reality or the policies that the country cares about.  I mean, when you go through the list of them, it just reinforces the notion that this is a party of no. 

But this, I think, is a bigger problem for Steele and a bigger problem for the Republican Party as they try to figure out, you know, how they put themselves in the strongest position for 2010. 

If they simply go down this road, what they‘re not going to do is not simply just lose candidates.  They‘re going to alienate voters and just in terms of candidates.  Look at, for example, places like Illinois and Delaware where two of the Republican candidates wouldn‘t meet this test.  It‘s illogical, if not downright stupid, to be blunt about it. 

DEAN:  Chris, special interest groups do this kind of stuff all the time.  They give political candidates questionnaires and they rate them and they endorse them.  And based on those answers, is that what the Republican Party is doing? 

KOFINIS:  Well, they seem to be mirroring that.  The problem with this, it‘s not interest groups which are on both sides of the ideological - all sides of the ideological spectrum.  You know, if the party is - or interest groups will do this. 

The difference here is the party is basically saying who can be part of the Republican Party.  And the logic part about this is - listen, it‘s simple politics.  I don‘t have to tell you, governor. 

You have to figure out a way to appeal to a wide swath of voters, not just mobilize your base, but figure out how to appeal to independents and moderates and bring those people over who may not be agreeing with every part of your ideological agenda. 

Their problem is, they want people to subscribe to their ideological agenda.  And they don‘t understand.  They seem no not understand politics.  You have to reflect what voters want and think.  You can‘t simply impose your beliefs.  And again, it just shows, I think, how radical the Republican grassroots have gotten. 

DEAN:  So a race like District 23 in upstate New York where Doug Hoffman was the conservative party candidate.  Dede Scozzafava didn‘t meet the purity test.  And so they ran her out of the race.  The Republican right wing did. 

And most of the presidential candidates talked about in 2012 came in and helped run the Republican out of the race.  The conservative lost, conceded, un-conceded, conceded again, un-conceded, et cetera, et cetera.  Do the Republicans think this is a win for them? 

KOFINIS:  You would think that they would realize by what they did in the 23rd district that it wouldn‘t be a winning strategy.  But in a strange, I think, twist of events, it actually is involved with them. 

They actually think what happened in New York 23 is a victory.  They actually think what‘s happening, for example, in Florida, where they‘re getting behind Rubio versus Crist is a victory. 

And again, I think it just shows how radicalized and how, you know, (UNINTELLIGIBLE) the right-wing base is getting to basically taking controls of the Republican Party.  It‘s going to become a real problem for Michael Steele and the Republican leadership. 

How do you appeal to moderates if basically you are unwilling to tell your base that they don‘t reflect what moderates or what most voters think?  It really is not a recipe for electoral success. 

And I think this is where I think Democrats have a real opening, that we can come out and say, “Yes.  We have some tough issues, but we are addressing them.”  They, meaning the Republicans, simply have an ideological, radical agenda that doesn‘t reflect your beliefs or your agenda. 

DEAN:  Democratic strategist, Chris Kofinis.  Thanks so much for joining us this evening.  We hope to see, maybe, Rachel have Chairman Limbaugh on next week.  Thanks very much.

Coming up on “COUNTDOWN,” Keith analyzes Sarah Palin‘s latest comments on Israel and asks if she is trying to bring about the rapture. 

And next on this show, state dinners and dinners - way, way out.  State cocktail moment - is that what?  What?  I can‘t read the teleprompter anymore.  We‘re going to hear about the state dinner a minute.

(COMMERCIAL BREAK)

DEAN:  Joining me now with tonight‘s “Cocktail Moment,” the executive producer of THE RACHEL MADDOW SHOW, Producer Guy One to all you Twitterers out there, Bill Wolff. 

BILL WOLFF, EXECUTIVE PRODUCER, THE RACHEL MADDOW SHOW:  Well, thank you, governor, which are words that I‘ve never spoken until this very moment.  Thanks for being here tonight.  I appreciate it. 

DEAN:  Yes. 

WOLFF:  You‘re a governor, a former DNC chair.  I have a Twitter account.  So we‘re even. 

Last night, in a shameless play for ratings, we broke news that was already everywhere else.  That‘s just good business.  The White House, we reported, would host its first state dinner tonight to honor Prime Minister Singh of our great ally, India. 

The dinner would be held in a lawn out back under a giant tent.  And tonight, we can report officially and exclusively that we got it right last night.  Good to be back off that (UNINTELLIGIBLE). 

They are having a state dinner right now with more than 300 very special guests.  Now, among those make the cut in Washington, Secretary of State Hillary Clinton, because you can‘t be very well have a state dinner without the Secretary of State.  It would be like having a birthday dinner six months later. 

New York City Mayor Michael Bloomberg, as if he wasn‘t going to get invited in a go.  Gen. Colin Powell, not representing THE RACHEL MADDOW SHOW, but he did once appear as a guest which is as close as we got.  And vice president Joe Biden who is, of course, vice president. 

Now, this state dinner, like all state dinners, is a great American event, a point of legitimate national pride, our president honoring a world leader of genuine significance. 

And as such, there is one question that most men, women and children in this country want to know tonight.  What‘s on America‘s menu?  What‘s for grub? 

Minutes ago, I was on scene to try to find out.  I turn now to me. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  The honorable Eric Holder. 

WOLFF (on camera):  Attorney General, hold it.  Hi, Mr. Holder.  Bill Wolff from THE RACHEL MADDOW SHOW.  I‘m great.  Listen - wait, you‘re not looking at me.  Look at me. 

Sir - Attorney General Holder, I just have one question, a very simple question.  Can I get a question?  Yes.  What‘s on the dinner menu?  No, I recognize - no, you didn‘t tell me what was on the menu. 

Speaker Pelosi, Bill Wolff from THE RACHEL MADDOW SHOW, MSNBC. 

Speaker Pelosi, could you just - one question?  What‘s on the menu tonight? 

Can‘t tell me. 

Secretary Geithner.  Secretary Geithner.  Secretary Geithner. 

Hi, it‘s Bill - don‘t want to talk about the fed. 

Oh, Brian Williams.  I got this one.  Brian, it‘s me.  Brian Williams, it‘s Bill Wolff.  You know, the other guy with the initials B.W.  at NBC News that you sometimes see in the hallway and occasionally recognize?  Fine.  Over here.  I want to know what‘s on the menu tonight.  Brian, anything - help a friend out.  Teammates, NBC.  Help.  Brian, don‘t walk away. 

(END VIDEO CLIP)

WOLFF:  A little embarrassing about Brian.  He must not have seen me, Gov. Dean, because we‘re dear, dear friends.  Anyway, my fact-finding mission was a bust.  But undeterred, THE RACHEL MADDOW night-sight eye team covered unit went to work.  We‘re doing the mass E-mails and Internet reporting that anyone who has a computer has probably already seen and we got some answers. 

On the menu tonight, Green Curry Prawns and Caramelized Salsify

with Smoked Collard Greens and Coconut Aged Basmati.  Delicious and healthy

sounding.  Red lentil soup with fresh cheese, Gov. Dean, because soup is

still good food.  And potato and egg plant salad.  White House Arugula with

·         wait a second, did I read that correctly?  Arugula?  White House Arugula? 

They grew it themselves? 

Did this administration learn nothing from the campaign?  Listen, a wedge of iceberg lettuce with a quarter ranch dressing is about as salad-y as you want to get, Mr. President.  Arugula?  Are you going to take everybody bowling afterwards because it worked out so good the first time? 

In boxing, we call that leading with your chin, sir.  Gov. Dean, I question the political savvy of this menu.  May I ask, have you ever been to one of these big shindigs? 

DEAN:  I have been to one. 

WOLFF:  And?

DEAN:  And the lady next to me pulled out her own dinner out of her purse and ate it.  I swear to god I‘m not making this up.

WOLFF:  Was that Carol Channing? 

DEAN:  I‘m not going to say because I still want to be on her Christmas card list. 

WOLFF:  You‘re a sly dog.  Now, as the black tie and evening gown set (UNINTELLIGIBLE) and kibitz on the White House lawn, the administration was being one-upped, 220 miles due north. 

No, not Dog Town, Pennsylvania.  Outer freaking space.  Yes, NASA will see your pre-Thanksgiving state dinner and raise you a pre-Thanksgiving, intergalactic shrink-wrapped dinner in a crumb-free, zero D environment. 

Here are astronauts Jeffrey Williams and Ms. Nicole Stott reviewing the culinary delights they‘ll enjoy with their Thanksgiving Day orange-flavored drink. 

(BEGIN VIDEO CLIP)

NICOLE STOTT, ASTRONAUT:  On the traditional side of things, we have some cauliflower and cheese.  And we really would like to point out that, now, it‘s very nice because we have foods from all of the partner countries. 

We have some European delicacies as was mentioned.  In this can, we have one of my favorites, which is a mushroom and truffle pate, very delish. 

JEFFREY WILLIAMS, ASTRONAUT:  Good stuff. 

STOTT:  Some cream spinach, which is also very good. 

WILLIAMS:  So light it floats. 

STOTT:  Fruit cocktail. 

WILLIAMS:  That‘s fruit cocktail?

STOTT:  Some oranges. 

WILLIAMS:  Delicious. 

STOTT:  Colorful, too. 

WILLIAMS:  Yes.

STOTT:  And our standard with the bread as we don‘t like crumbs up here is to use tortillas, which are also very delicious. 

WILLIAMS:  I‘ll say.

STOTT:  And we‘ve got to show the spicy green beans. 

WILLIAMS:  You got it, don‘t you?  You‘re all the way up there.

STOTT:  And the yummy spicy green beans.  Unfortunately, we don‘t get to make green bean casserole, but this is about the next best thing. 

(END VIDEO CLIP)

WOLFF:  Well, once again, the space program, solving unsolvable programs.  Number one, how do you eat Thanksgiving dinner without putting on weight?  Zero G, duh.  And how do you avoid family drama at the holidays?  Well, in space, no one can hear your family scream. 

If only every tax dollar were that effective, Gov. Dean, don‘t you think? 

DEAN:  Yes, sir.

(CROSSTALK)

WOLFF:  I‘m sorry to interrupt you, sir.  I‘m being told in my ear by the control room, we have just one more piece of late-breaking news tonight.  Just a second. 

This just in at the “Cocktail Moment” newsroom, I want to make sure I get this right.  Dr. Howard Dean‘s latest book, “Dr. Howard Dean‘s Prescription for Real Health Care Reform,” is available online and at fine booksellers near you. 

Now, sources tell the “Cocktail Moment” newsroom that it‘s a - let me get this wording right - a lively and detailed read and makes an excellent and extremely readable case that reform is imperative.  Dr. Dean will have more details as they become available. 

DEAN:  I will have many.  Thanks, Bill, for this.  

WOLFF:  My pleasure. 

DEAN:  We‘re hard out. 

WOLFF: 

DEAN:  I want to appreciate being hazed and that‘s not shown the teleprompter for the last quarter of the show.  So it‘s been a lot of fun. 

WOLFF:  You‘re doing great. 

DEAN:  And now to Keith.  Thanks for watching tonight.  “COUNTDOWN” starts now.

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

END   

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