updated 12/7/2009 10:49:58 AM ET 2009-12-07T15:49:58

Guests: Austan Goolsbee; Peter Morici, Noel Davis, Theodore Simon, Alan Grayson, Gregory Meeks, Katrina Vanden Heuvel, John Feehery, Roy Sekoff, Lizz Winstead

ED SCHULTZ, HOST:  Good evening, Americans.  Welcome to THE ED SHOW in New York tonight.

We are waiting the verdict of 22-year-old Amanda Knox, an American who stands accused of murder in Italy.  We will bring you the latest as the story developments, but first, we have got some good news on the job front today. 

The unemployment rate has now dropped to 10 percent, a welcomed surprise to the Obama economic team, especially on the day that the president kicked off his economic tour in Allentown, Pennsylvania.  Allentown unemployment rate sits at 9.1 percent, better than the national average, but manufacturing in that area has been hit hard. 

And today, the president took a cautious approach on the numbers. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I do want to keep this in perspective.  We‘ve still got a long way to go.  I consider one job lost one job too many.  And as I said...

(APPLAUSE)

As I said yesterday at a jobs conference in Washington, good trends don‘t pay the rent. 

The journey from here will not be without setbacks or struggles.  There may be gyrations in the months ahead.  There are going to be some months where the reports are a little better, some months where the reports are worse, but the trend line right now is good. 

(END VIDEO CLIP)

SCHULTZ:  The president says the trend is good.  You hear him there.  And it is true.  But when you take a look at the numbers, it‘s still brutal out there. 

We lost 598,000 jobs in the month of January, 2009.  Now, less than a year later, the worse month of pink slips—that was in 1974.  In the month of November we lost 11,000 jobs. 

That‘s a big turnaround.  It‘s a big improvement.  The numbers look a lot better. 

The president still has his work cut out for him, and he knows it.  Fifteen percent unemployment in Michigan; 13 percent in Nevada, 12.5 percent in California.  El Centro, California, has a 30 percent unemployment.  That is the highest unemployment rate of any city in the nation.  Twelve percent in South Carolina. 

Now, next Tuesday, the president is going to deliver a major speech on the economy.  The White House is looking for ideas on economic recovery. 

Joining me now is Austan Goolsbee, a member of the Council of Economic Advisers and the chief economist for the president‘s Economic Recovery Board. 

Have I been wanting to talk to you for a few days.  Good to have you with us, Austan. 

AUSTAN GOOLSBEE, CHIEF ECONOMIST, PRESIDENT‘S ECONOMIC RECOVERY BOARD: 

Great to see you again, Ed. 

SCHULTZ:  All right.  You‘re looking for ideas.  What kind of ideas do you think might surface? 

I know you had the jobs conference yesterday.  I talked to a few union leaders.  When they got out of that, they were impressed with the mix of people the White House brought together. 

What kind of ideas are you looking for? 

GOOLSBEE:  Well, that jobs forum was really quite instructive, I thought, and it broke it down into sections where the various ideas are coming from. 

One of the most important—and I wanted your plan from the beginning, Ed—is small business, that we have a serious small business credit crunch going on at this time. 

SCHULTZ:  Get workman‘s comp off my back.  Do that.  Our concrete company is getting smoked by 10 percent. 

I‘m serious now.  We‘re having a serious conversation here.  I‘m not kidding around. 

I think if you‘re looking for an idea, I think the government should get involved in the business of injured workers, workman‘s‘ comp.  This is really strangling small businesses across the country.  I hear it wherever I go.  And if you could just take some of that bailout money and put it towards that to help out businesses, you don‘t have to go through the loan thing. 

I mean, it deals directly with the workers and the workforce.  I really think that would help, Austan. 

GOOLSBEE:  Well, I will look into that.  You know, several folks have put forward various—I‘d classify that in a regulatory-type area, how to unleash small business.  But beyond just regulatory, we heard a lot about credit for small business, even from big companies. 

I talked to some CEOs of the biggest companies in the country, and they said one of their big fears for 2011 and 2012 was that their own suppliers would not be able to get credit and that would impinge on their business.  You saw a lot of clean energy and technology-type of ideas, and I think there could be some things there.  And then you just saw old-fashioned economic infrastructure, roads and bridges and water and airports and stuff like that.  A lot of people. 

SCHULTZ:  What about the bailout money being used—being, should I say, redirected into job creation and fast-track it and streamline it—and I‘m not talking Small Business Administration.  I‘ve got a story coming up here in just a minute.  A guy wants to do some windmill stuff. 

I‘ll tell you about it in a minute, folks. 

But what about the fast-tracking of the money? 

GOOLSBEE:  That‘s absolutely worth consideration.  You saw a number of people at the jobs forum talking about things like that.  And so we‘re certainly putting that on the table. 

SCHULTZ:  All right. 

Are you high-fiving behind closed doors now that it‘s down to 10 percent?  I know it‘s a brutal number, but it is...

GOOLSBEE:  Right. 

SCHULTZ:  You‘ve got a number of things.  You‘ve got GDP moving in the right direction.  You‘ve got the job claims which is moving in the right direction.  You‘ve got unemployment moving in the right direction. 

There are some things happening out there.  If you guys can free up the lending, I think you‘re going to be home free. 

GOOLSBEE:  Look, I think this is the beginning of the recovery.  But as long as I live, you‘re never going to see me say that a jobs report with a negative number is a good jobs report, because it‘s not. 

Eleven thousand people lost their jobs, but 11,000 losing their jobs is a lot better than 749,000 losing their jobs, which is what happened the month that Barack Obama came into office.  So it‘s clear that we‘re on the right trajectory, but we‘ve got a long way to go. 

And the president identified early that the unemployment rate may be down a little bit, but, look, once we start generating jobs, that may tick back up.  The unemployment rate may tick back up as a bunch of people not in the labor force come back in.  So, as you said, we‘ve got to get the lending going again for this thing to really be going. 

SCHULTZ:  If you can do it for Wall Street, you can do it for Main Street.  I think it‘s a positive thing.  You‘ve got some things cooking. 

Here‘s one number that really got to me, a story out of Los Angeles.  There‘s a brand new motel there, the W Hotel.  OK?  We‘ve got one here in New York, the W Hotel.

GOOLSBEE:  I don‘t know.  I‘m a little suspicious. 

SCHULTZ:  Well, there‘s 400 jobs open, OK? 

GOOLSBEE:  Yes. 

SCHULTZ:  Eleven thousand applicants.  Holy smokes.  I mean, there‘s people out there that would do just about anything to get back to work again.  We‘ve got to figure this thing out. 

GOOLSBEE:  Yes.

SCHULTZ:  Austan, good to have you with us tonight.  Thank you. 

GOOLSBEE:  Hey, great to see you again, Ed.

SCHULTZ:  You bet.

All right.  Get your cell phones out, folks.  I want to know what you think about this. 

Our text survey tonight: Do you think the president and his team will lower unemployment under 10 percent in the next year, 2010? 

Text “A” for yes and “B” for no to 622639. 

Now, not to sugarcoat everything that‘s out there—not everybody feels that we are headed in the right direction—I want to move now to the economist Peter Morici.  He is a business professor at the University of Maryland. 

Mr. Morici, great to have you on tonight. 

You have written some material as of late that makes me believe that you‘re not exactly that confident that we‘re in the right direction. 

What do you think? 

PETER MORICI, ECONOMIST:  Well, certainly 11,000 jobs, I mean, I‘m happy to be wrong today and to see it come down so well and to have unemployment come down. 

Now, looking at the jobs report in detail, I have to say, I didn‘t see a lot of evidence of the stimulus package.  Where the jobs were created were in private business services. 

We weren‘t getting the help we would expect from stimulus in things like construction or government employment.  But what this does do is it takes a little bit of the pressure off the president so he can craft something if he‘s going to have a jobs initiative that really gets the money into hands of people that will spend it. 

SCHULTZ:  What would you do? 

MORICI:  Well, you know, just about every city and county in the country has schools that need to be renovated.  Let‘s get it out to the mayors and county executives and say you‘ve got to—here‘s so much you‘re going to spend in the next 90 days, here‘s so much you‘re going to spend in the next 180 days, and so forth, because they have got lots of projects in the queue. 

The weatherization is a good idea.  Lots of highway projects—our construction companies say their order books are running out, that they‘re going to have to start laying people off, January, February.  That‘s not good news. 

So I think those are things that we could do.  But longer term, we have to recognize that stimulus only is a Band-Aid.  It gets us going. 

We have to fix what‘s structurally broken.  And that‘s two things, in my mind, the bank and the big trade deficit with China, its undervalued currency. 

We lost over 40,000 manufacturing jobs this month, 5.6 million in this decade.  A lot of those jobs have been lost because of unfair trade from China.  The president talked about it during campaign, Geithner talked about it during confirmation.  Now they‘ve got to remember that they talked about it and get something substantive done with China. 

SCHULTZ:  Professor, good to have you with us tonight.  Appreciate your time so much. 

Peter Morici with us here on THE ED SHOW.

Now, last night on this program, I told you about this guy that‘s got an idea and has got everything.  He just needs little bit of help as far as a loan guarantee.  The government can help—can help entrepreneurs and small business owners by doing just a few simple things. 

Noel Davis has a company.  He makes parts for wind turbines.  He wants to build a plant in Indiana, manufacturing jobs.  You know what I mean? 

Here‘s the deal.  These are good jobs in a state that is desperate for new manufacturing.  And we‘re talking green energy.  That is the future. 

There‘s unlimited business potential here.  But if he could only cut through the red tape and get a loan guarantee—he‘s not asking for a handout—he wants a loan guarantee, wants to be backed up by the Energy Department.  If he could just get that, he could go.  He joins us tonight. 

Mr. Davis, retired Navy commander, great to have you with us tonight. 

What do you want to do, Mr. Davis?  Tell our audience tonight, what do you have in mind, what do you want to do? 

NOEL DAVIS, ENTREPRENEUR:  Well, thanks, Ed, for having me. 

First of all, I drove up from Indianapolis to Grand Rapids today to look at a machine tool manufacturer that makes test equipment.  What we‘re going to do is, with a seasoned crew of professionals that have been in this business before, we‘re going to build a facility in Indiana that‘s going to manufacture components.  And we know, because we were in this business before, that about 86 percent of those components are currently imported from high-cost areas, and transportation costs are high.

So, with some bank debt, which we can‘t access now because of the credit markets, we can‘t get the machine tools.  The key to this business is having high-quality machine tools.  With those machine tools, we‘ll need high-quality workers, machinists, which are readily available where I live in central Indiana.

(CROSSTALK)

SCHULTZ:  So what‘s the holdup?  You want to compete against the Chinese because the equipment that we‘re using right now in wind energy in this country, 80-some-odd percent of it is coming in from China and Europe.

Is that correct?

DAVIS:  Yes, that‘s right.  Mostly Europe, but the Chinese are ramping up.

SCHULTZ:  OK.

DAVIS:  And, so, we need the machine tools.  What prevents us from getting those machine tools is access to credit. 

SCHULTZ:  All right.  Now, you have applied for a loan guarantee from the Energy Department, and basically you‘re sitting there waiting.  Is that right? 

DAVIS:  Yes, sir, that‘s exactly right. 

SCHULTZ:  And how long has this process been going on? 

DAVIS:  Well, it took us three or four months, maybe a little longer, to actually fill out our application with a lot of help.  And we applied in the second deadline in early October. 

SCHULTZ:  And how many jobs are we talking about?  How many people—if you got the Energy Department to say, OK, Noel Davis, get on a roll, here‘s your loan guarantee, how many jobs are we talking about? 

DAVIS:  Well, we‘ll directly employ, once the company is ramped up, a couple hundred machinists on three shifts running 24/7.  But what I do want to point out is—that‘s why I‘m here in Grand Rapids—is we‘ll also be buying machine tools from other companies in the United States, and also buying high-quality steel from many of the steel providers here in the United States.  More than just a couple hundred jobs. 

SCHULTZ:  Yes, it‘s more than a couple hundred jobs.  There‘s going to be a ripple effect. 

You‘re not asking for handout.  You‘re playing by the rules with the Energy Department, but they‘ve got to get on the fast track and work with you. 

We‘re going to follow this story, Mr. Davis.  I think you have got a great idea.  And this is what the administration has been talking about.  And I think you‘re going to be back with us, because we‘re going to continue on. 

I want to make sure you get that loan guarantee, because this is what we‘re talking about.  We do it in a matter of hours for Wall Street, but we‘re making guys like you wait too long.  I don‘t like that. 

Mr. Davis, good to have you with us tonight. 

DAVIS:  Thank you.

SCHULTZ:  All right.  We have got breaking news. 

American student Amanda Knox has been found guilty of murder.  The jury in Italy found Knox guilty of murdering her British roommate while studying abroad. 

For more, let me bring in criminal defense attorney Theodore Simon. 

Mr. Simon, appreciate your time tonight on this breaking story. 

Tell us, was this a hard case to try or was this a prosecutor‘s dream? 

How complicated was this? 

THEODORE SIMON, CRIMINAL DEFENSE ATTORNEY:  Yes, it was an extremely complicated case.  And, in fact, this news story is really on target and perhaps even ahead of the story. 

As you just said, this is breaking news.  The court has just found her guilty and sentenced her to 26 years. 

I‘m sure it‘s devastating to the family who‘s put their heart and soul in the case.  And, in fact, when one reviews the evidence objectively, one has to come away and wonder how this verdict was found in this way, because what we do know, this was a heinous murder, it was a brutal murder, and, yet, in the room where Amanda Kercher (sic) was found, there was no evidence whatsoever of Amanda Knox either on her body or in the room. 

That is, there was no DNA, there was no fiber, there was no fingerprint.  There was simply no evidence whatsoever that linked Amanda Knox to the location of the body or the room. 

And this presents a significant hurdle in a case where the allegation was a gruesome struggle/murder that resulted in a bloody killing.  So, that, on top of the fact is there was another defendant who was previously tried in a fast-track trial who was convicted, who admitted to being present, and all of the forensic evidence, including his DNA, prints, fiber, as well as a palm print, his DNA on the bra, his cells found on her vagina—that‘s the deceased—I‘m sorry to say that, but that was the case.  And there was so much evidence that pointed to the other codefendant, Rudy Guede, that makes it even more unlikely that Amanda Knox was involved. 

So, it‘s a crushing blow to the family.  Obviously, the court took into consideration certain mitigation because they sentenced her to less time than they did to Rudy Guede. 

So the question now is, she has an opportunity to appeal to an appellate court that‘s composed of eight individuals, two professional judges and six lay citizens, and thereafter can appeal to the supreme court of Italy. 

And finally, there is some further hope if she is not salvaged by her appeal, which is certainly a distinct possibility, there‘s the opportunity to come back on what‘s called an international prisoner transfer.  And having significant experience in this area, it provides a great opportunity for a foreign national who‘s tried in a foreign court to come back and serve their time in their own country. 

SCHULTZ:  Yes.

Mr. Simon, from listening to you, it doesn‘t sound like there was a lot of overwhelming evidence to convict Amanda Knox. 

SIMON:  That‘s true. 

SCHULTZ:  Case for appeal—what are her chances, in your opinion? 

SIMON:  Well, she does have a distinct opportunity for appeal.  In Italy, a person has greater appellate and broader appellate rights than they might have if they were appealing a case in the U.S.  So, she has a distinct possibility of reversing the conviction, and I‘m sure her family will continue to support her and proceed with that appeal. 

SCHULTZ:  Amanda Knox, breaking news tonight here on MSNBC.  The United States student Amanda Knox has been sentenced to 26 years. 

Would that be a full 26 years if there was not an appeal, or is there a parole opportunity here? 

SIMON:  I‘m sorry, I didn‘t hear you.

SCHULTZ:  Is there a parole opportunity here? 

SIMON:  There are opportunities for early release with good time credit and the like.  They do have that system in Italy.  However, one would not want to do the full extent of this sentence. 

SCHULTZ:  OK. 

Mr. Simon, thanks for your time tonight. 

SIMON:  You‘re welcome. 

SCHULTZ:  I appreciate it very much. 

Coming up, a brutal battle has broken out between Congressman Alan “Tell it Like it is” Grayson and Tom Coburn over on the Senate side.  Grayson will be here to sound off in just a moment. 

And after further review on Afghanistan, I‘ve got a major concern to share with you tonight.  Congressman Gregory Meeks will be on with me to talk to me about that.

All that, plus “Daily Show” co-creator Lizz Winstead in the house tonight, and “Huffington Post” founding editor Roy Sekoff talking with us tonight. 

It‘s all coming up on THE ED SHOW.

You‘re watching MSNBC.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

Just how stupid are the Republicans?  Medicare hater Tom Coburn, senator out of Oklahoma, has a new plan to expose the public option.  See, he has an amendment that would force lawmakers to go into any public plan that is passed by the Congress. 

Will the Democratic senators go into a meltdown about the possibility of death panels, rationed care and dying in the waiting line?  Absolutely not.  In fact, Democratic senators, they‘re signing on to the measure because Democrats don‘t believe Republican lies. 

Our problem is trader Joe Lieberman.  He held a press conference today where he attacked the 50-odd members of his caucus who support the public plan. 

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT:  I think it was originally put in there as a kind of accommodation for people who really want a single-payer, government-controlled insurance company and government-controlled health care system.  That‘s their right to believe that, want that. 

I think it would be wrong and terrible for our country.  But if they want that, let‘s come out and have a debate on a single-payer system.  Don‘t try to get the foot in the door in a way that really does nothing good and opens us up to risks. 

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Florida Congressman Alan Grayson. 

I am floored by that sound bite right there, Mr. Grayson, because where was Joe Lieberman when they took single payer off the table?  He ought to be talking to his buddy Max Baucus about that, but that, I guess, is another day, another story. 

Where does this stand right now?  As you view it from over on the Senate side—you‘re on the House side.  Over on the Senate side, are they just watering this thing down to the point where it won‘t be effective at all? 

What do you think?

REP. ALAN GRAYSON (D), FLORIDA:  No, I don‘t feel that way.  What‘s important to me above all is we have universal coverage.  It looks to me like the Senate bill is going to have universal coverage. 

The Senate bill is going to still eliminate the ability of insurance companies to cut you off, to cut off your care, just because you have a pre-existing condition or they spent a certain amount of money on you.  These are fundamental reforms. 

The insurance companies are going to still have to pay out 85 percent, not 70 percent of all the money that they received from their customers, you and me.  That‘s a fundamental reform that I think is very worthwhile. 

I hope the public option remains in the bill.  I hope it‘s a strong public option.  But there‘s still a lot of worthwhile things that are going to save lives and save money under any incarnation of the Senate bill. 

SCHULTZ:  So are you saying tonight that you would be OK with a health care bill that did not have a public option? 

GRAYSON:  I‘d be extremely disappointed.  I‘m fighting for the public option.  But I want a bill that provides universal care, comprehensive care, affordable care, no matter how we get there. 

SCHULTZ:  What do you think about Mr. Coburn, the senator from Oklahoma who‘s made some—what do you think? 

GRAYSON:  Well, look, you know, people have compared me to him, but there‘s no moral equivalence between telling the truth and telling a lie. 

I said—I exposed the fact that the Republicans don‘t have a health care plan, that all they do is they complain, they carp about the Democrats‘ efforts to solve one of the fundamental problems the country is facing.  They‘re the party of no.  That‘s all that they are.

So I stand by what he said.  I don‘t know how he can stand by what he said.

I think he‘s part of a right wing in America that basically consists of two parts.  The right wing consists of the liars and the gullible.  They generate the lies and the gullible—they just soak them up.  And it‘s a symbiotic relationship that he‘s feeding into. 

SCHULTZ:  And is the Stupak Amendment going to be the final sticking point in all of this, to the point where it could actually shut down any kind of reform this year, in your opinion? 

GRAYSON:  No, I really, really do believe that we are going to see reform this year.  I‘m hoping the Senate votes before Christmas.  I‘m hoping that we have the final bill before the end of February.  And I think that that‘s realistic. 

I don‘t think anything is going to stand in the way because our needs are great.  There are so many people dying in America, there are so many people who are sick in America simply because of the system we have now.  It cannot go on any longer. 

SCHULTZ:  No, it can‘t.  And I‘m sure you saw that story today where Aetna is telling a half a million customers good-bye because we didn‘t make enough money last year.  It‘s amazing. 

GRAYSON:  Listen, we have a system—we have a system, Ed, where insurance companies make money by denying people the health care that they need. 

SCHULTZ:  Yes.  They do. 

GRAYSON:  That‘s the fundamental problem that we all face.  We‘re trying one last time to fix this system and to make sure that it doesn‘t kill any more people any longer, and that people get affordable care when they need it. 

SCHULTZ:  Congressman, keep telling it like it is.  Appreciate your time.  Thanks so much. 

GRAYSON:  Thank you, Ed. 

SCHULTZ:  Coming up, Sarah Palin whines about how tough the press is for expecting her to answer questions like, what newspapers have you been reading?  She thinks it‘s fair game to question if the president of the United States is a U.S. citizen? 

“Psycho Talk” is next.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, our favorite, former Alaska governor and current Tea Party celebrity Sarah Palin. 

All right.  She went on a righty talk show yesterday, and basically it was about 15 minutes of straight “Psycho Talk.”  We couldn‘t get all of it.  But the most psycho part came up when she bought into the birther nonsense. 

(BEGIN AUDIO CLIP)

RUSTY HUMPHRIES, RADIO TALK SHOW HOST:  Would you make the birth certificate an issue if you ran? 

SARAH PALIN ®, FMR. ALASKAN GOVERNOR:  I think the public rightfully is still making it an issue.  I don‘t have a problem with that. 

HUMPHRIES:  Do you think it‘s a fair question to be looking at? 

PALIN:  I think it‘s a fair question just like I think past associations and past voting records, all of that is fair game.  You know, I‘ve got to tell you, too, I think our campaign, the McCain/Palin campaign, didn‘t do a good enough job in that area. 

(END AUDIO CLIP)

SCHULTZ:  Really?  I guess all those “palling around with terrorists” lines weren‘t enough gutter politics for Sarah Palin. 

Anyway, after she gave that interview, someone must have clued her in that this birther claim has been thoroughly debunked, because late last night she logged onto Facebook and clarified her remarks, of sorts.  She wrote “voters have every right to ask candidates for information if they so choose.  But at no point during the campaign, and not during the recent interviews have I asked the president to produce his birth certificate or suggested that he was not born in the United States.”

OK, I get it now.  She‘s not suggesting Obama wasn‘t born in the United States.  She‘s just legitimizing her crazy right wing birther base who believes it.  Same difference.  Sarah, it‘s all Psycho Talk.

Coming up, insurance giant Aetna decided—see they didn‘t rake up enough money this year, so they‘re jacking up the rates on over half a million people who are going to lose their insurance.  “Huffington Post” founding editor Roy Sekoff has got a lot to say about that in the playbook.

And Defense Secretary Gates just spilled the beans of just how long we‘re really going to be in Afghanistan.  It‘s got me second guessing big time on the whole thing.  Congressman Gregory Meeks and Katrina Vanden Heuvel are going to be weighing in on this. 

Plus, “Daily Show” co-creator Lizz Winstead in the house tonight for Club Ed.  Stay with us.  You‘re watching THE ED SHOW. 

(COMMERCIAL BREAK)

OBAMA:  I have determined that it is in our vital national interests to send an additional 30,000 U.S. troops to Afghanistan.  After 18 months, our troops will begin to come home. 

(END VIDEO CLIP)

SCHULTZ:  Is that what you heard?  After 18 months they‘ll begin to come home?  Upon further review, I‘m having doubts about the president‘s Afghanistan plan.  I said I‘d stick by the president because he had that timeline, that sound bite, 18 months.  I can support the escalation, if the war starts to close in 18 months, and we‘re on our way home.

But now, gosh, it kind of sounds like it could take years to actually get our troops out of there.  Here‘s Defense Secretary Robert Gates. 

(BEGIN VIDEO CLIP)

ROBERT GATES, DEFENSE SECRETARY:  July 2011 is the beginning of a process.  And the pacing of that process and where it will happen will be conditions based on the ground, as the president said. 

The American people want to know that this isn‘t just going to be another ten years of commitment, at 100 billion dollars a year, and with our troops committed to the degree that they are now.  I think there‘s plenty of flexibility in this process, in terms of the pacing of the draw down and the conditions based. 

(END VIDEO CLIP)

SCHULTZ:  Secretary gates says it could take up to three years to complete the withdrawal.  I don‘t think the American people are in the mood for any of that kind of stuff.  We‘re going to know early on whether we can get this thing done or not.  That‘s how I feel. 

Joining me now is New York Congressman Gregory Meeks.  He sits on the House Foreign Relations Committee and also Financial Services.  Congressman, good to have you in the house tonight. 

REP. GREGORY MEEKS (D), NEW YORK:  Good to be with you, Ed. 

SCHULTZ:  The Congressional Black Caucus is starting to play pretty tough with the White House for now creating jobs fast enough and some of the numbers that have been out there in the inner cities have been tough.  Does this give you some leverage in dealing with the president on Afghanistan?  Or are they two completely different issues? 

MEEKS:  I think they‘re completely different issues.  The Congressional Black Caucus, we‘re going to do our job.  The president has his job.  Our job is to make sure we do what‘s in the best interest of our constituents. 

SCHULTZ:  If he‘s sending 30 billion dollars and a bunch of more troops over to Afghanistan, doesn‘t that make the case that he has to do more here at home, and free up some of that bailout money to start creating jobs?  What do you think?

MEEKS:  I think the indication is that the money is the bailout money

·         or the money that is being paid back by the banks, with the interest, that that money should be utilized to help create the jobs in America that we need to do. 

At the same time, I am reminded of the fact that there is a direct connection between 9/11 and Afghanistan.  And I know that when 9/11 initially happened, the congress was just about 100 united on going to Afghanistan.  What divided us was Iraq.  We should have been in there dealing with Afghanistan, because that‘s where the problem had existed and continues to exist. 

SCHULTZ:  Do you support the president on this move?  Can you go along with him? 

MEEKS:  I‘m going to continue the ask the questions.  I asked questions during the hearing when Secretary Clinton and Gates and the admiral was there.  I‘m going to—this is one of the most serious votes that one has, when you‘re talking about escalating and sending one‘s loved ones to war. 

SCHULTZ:  This is interesting.  Let‘s see, Pat Leahy said that he‘s reserving judgment.  Byron Dorgan told me today on the radio he‘s reserving judgment.  Dick Durbin is reserving—is this the Washington answer? 

MEEKS:  No—this is the hardest—when I decided to vote for Afghanistan, it was a hard decision.  Against Iraq, the hardest decision.  This is the hardest decision that I think a member of Congress has.  You have to dot your I‘s and cross your T‘s and try to be as sure as you possibly can. 

SCHULTZ:  This commitment has been made, congressman.  They‘re going. 

MEEKS:  They have to come to the congress to fund it and ask for the money.  Therefore, my job is to ask the legitimate questions, to make sure that I‘m doing right thing, or what I believe is the right thing on the behalf of the constituents that I represent, and the people of the United States of America. 

SCHULTZ:  So you‘re reserving judgment tonight, and you can‘t totally commit behind the Afghan commitment? 

MEEKS:  I will tell you that I like what the president said.  I will tell you that some of the questions I asked during the hearing  was—I got the answers that I thought were good.  But I still have more deliberations to do.  And I am concerned about particularly the connection of Afghanistan to Pakistan.  Because in Iraq, we didn‘t know whether there was weapons of mass destruction.  In fact, we knew—based upon the information I had, there was none.  In Pakistan, we know there‘s weapons of mass destruction. 

SCHULTZ:  Is bin Laden relevant to you? 

MEEKS:  Bin laden is—as a symbol, he‘s relevant.  But to me, what‘s more relevant is the fact that we have these borders between Afghanistan and Pakistan, and Pakistan has nuclear weapons.  And I know those in the Taliban would love to get their hands on those nuclear weapons.  That‘s the danger to this country.  As a member of Congress, that‘s my first obligation. 

SCHULTZ:  Congressman Meeks, good to have you with us tonight.  Thank you so much.

For more, let me bring in Katrina Vanden Heuvel, senior editor at “The Nation.”  Katrina, how do you feel about this?  Is this the right or the wrong move by the president? 

KATRINA VANDEN HEUVEL, “THE NATION”:  I think it‘s the wrong move, Ed.  Listen, I support the reform presidency of Barack Obama.  Wars suck the oxygen out of reform presidents.  But more important, President Obama came to the country and said our vital national interests are at stake at Afghanistan.  We‘re going to commit more than 100 billion dollars, 100,000 troops to fighting maybe 100 al Qaeda operatives, according to the national security director, himself, who said Afghanistan doesn‘t present a vital national security interest threat to the United States. 

So I have to think, Ed, that there have to be better ways to fight terrorism.  Conventional war, counter-insurgency is not the way to secure our country.  And I have to say President Obama‘s speech, where he spoke about rebuilding our nation at home, that we do best by living our values and fulfilling our democracy—the last quarter of that speech at West Point in so many ways seemed undermined by what he was doing by dispatching men and women to fight or die or be wounded in the mountains and valleys of Afghanistan. 

SCHULTZ:  Do you think he had this planned all along?  He was out on the campaign trail saying that he was going to draw down in Iraq and beef up the forces in Afghanistan.  The country‘s mood on that has changed quite a bit.  It‘s at 51 percent, the latest number out there, supporting the president on this move. 

VANDEN HEUVEL:  This is a war wary country, Ed, after the Iraq debacle.  yes, I do think part of the problem in our country, Ed, is that we have an establishment, Republican, also Democratic, which believes that showing toughness is going to war.  There are other tools in the toolbox.  Military force, in our century, is not the central way to deal with nuclear proliferation. The congressman was talking about that.  Or pandemics or some of the central challenges, like terrorism. 

President Obama, I fear, had to show he was being tough, so he was going to be against Iraq, but for Afghanistan.  It is no longer 2001.  We have moved on.  And the terrible tragedy of 9/11, the overreaction to that tragedy has been a tragedy, too.  We are now in two wars.  We—over ten years‘ time, if we keep 75,000 troops in each theater, in Iraq and Afghanistan, we will have lost many more Americans than we did on the tragic day of 9/11. 

SCHULTZ:  Will this cost him his presidency?  Is this the moment that we might point back to, saying Barack Obama lost the election when he decided to upgrade the force and more commitment in Afghanistan? 

VANDEN HEUVEL:  You know, Ed, I think it goes beyond losing the election or losing his presidency.  It goes to losing the possibilities of fulfilling a reform agenda and rebuilding America.  That is what the presidency stood for. 

SCHULTZ:  Katrina, if he loses the election, the reform agenda is history, we‘re back to the righties. 

VANDEN HEUVEL:  He might still win, because it takes a horse to beat a horse, sorry to say.  There‘s no alternative in that party, which has enlisted liars and lunatics to wage a war on reform in this country.  I‘m talking about the Republican party. 

But we can do better.  We need to craft a new way of thinking, an alternative way of thinking, in this country.  And President Obama is at risk now of losing those who supported him, though I don‘t see betrayal, because I think we have to understand the structural challenges and fight hard to get out of Afghanistan.  Because, as you said, Secretary of Defense Gates—you know, 2011 may be a starting point.  Maybe take out 20, 30 --

SCHULTZ:  I need a date. 

VANDEN HEUVEL:  We need a way out.  That‘s where Congress needs to stand up. 

SCHULTZ:  I can‘t go with this open ended stuff.  Katrina, great to have you on tonight.  Thank you so much.

For the other side of the story, let‘s bring in John Feehery, Republican strategist.  John, do we have to do this?  Does the president have to do this?  Is this the only way to get it done, to beef up? 

JOHN FEEHERY, REPUBLICAN STRATEGIST:  Ed, I could barely hear you.  I don‘t—I believe that this is the best strategy going forward.  I think it‘s exactly the right thing to do for our national security and our national interest.  I think it‘s important that the president take this step.  I disagree with you on the timeline.  I think that‘s the biggest mistake—

SCHULTZ:  Why would that be a mistake? 

FEEHERY:  I think that you don‘t tell your enemy when you‘re leaving.  Then they play to that deadline.  I think we need to focus on winning.  I think we need to focus on securing that area.  I don‘t think—our troops need the reinforcements.  I think from that simple perspective—you know, the president has two choices.  He has the choice of either winning or just completely pulling out and, frankly, losing.  I don‘t think losing is the right choice. 

SCHULTZ:  Well, I think the president set himself up.  I mean, if he were to not beef up at this point and send these troops in there, the conservative movement in this country would tear him apart, say you can‘t trust him, he‘s weak on terror, this that and the other.  I think the president—

FEEHERY:  I don‘t think he‘s doing this because of Republican stuff. 

SCHULTZ:  I think it has a lot to do with it.  To be a man of honor, I don‘t think you can go on the campaign trail and say, oh, by the way, I‘m changing my whole plan.  There were multiple sound bites out there, and instances where he said, look, I‘m getting out of Iraq; we‘re going to get the terrorists in Afghanistan.  Of course, the mood of the country has shifted quite a bit. 

I could go along with it if it was date specific.  I‘m not convinced that—you know, if we can‘t decide in 18 months what the heck we‘re doing over there, after beefing up with more and more resources, when are we going to do it?  That‘s what I don‘t like about it. 

FEEHERY:  I don‘t know of any time in our nation‘s history where we predicted an exit strategy in any war.  War is always messy. 

SCHULTZ:  This is a totally different situation and totally different history, John. 

FEEHERY:  You cannot predict the future.  And you cannot say, you know, in 18 months, I thing that‘s going to be the perfect time to leave.  What if it‘s the absolute worst time to leave?  It might be earlier.  Maybe we can get out earlier.  Who knows? 

The fact of the matter, you can‘t have deadlines like this.  I think that Defense Secretary Gates got it exactly right by giving himself some wiggle room, which is desperately needed. 

SCHULTZ:  John, good to have you on.  Thanks so much. 

Coming up, Aetna just made a greedy decision that will force 650,000 people to lose their health insurance.  I‘ll tell you what that‘s all about when we come back in the playbook.

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, I guess you could say that we have exhibit A in a case for a public option.  The stories just keep coming, don‘t they, folks?  The greed of the health insurance giant Aetna is going to force more than half a million people, clients to lose their coverage.  Aetna didn‘t make—see, they didn‘t make much money in the last quarter, so they‘re jacking up their rates for 2010.  How many of you got that candy gram in the mail? 

That‘s a move that the company admits will make up to 650,000 people lose their health insurance.  Joining me now is the founding editor of “Huffington Post,” Roy Sekoff.  They just keep coming at us, don‘t they, Roy?

ROY SEKOFF, “THE HUFFINGTON POST”:  Ed, this is what happens when you make the health and well-being of the American people a bottom line business.  As you said, it‘s exhibit A of why we need a public option.   We need a strong public option and we need a public option that starts on day one, not 2014.  As you say, they only made 28 percent more in the third quarter last year than they did the year before.  So they had to jack the prices up. 

SCHULTZ:  And such stuff as that, maybe they‘d have more for profit.  Here‘s a couple of numbers I think are pertinent: Aetna‘s decline in profit margins behind a decision to jack up the prices—their profit margin declining over time, in 2007 11.1 percent, then in 2008 it went to 10.3.  Then in this third quarter of ‘09 it went to 6.9.  The source, of course, the “American Medical News.” 

Now, the results the last time they pulled a stunt like this in membership in 1999, it was at 21 million.  In 2003, when they made this move, they cut down to 13 million.  There you see the profit margin that went from four to seven percent.  If this is the way it‘s going to be, and if we are going to run health care in this country strictly for profit, the number of people without insurance is only going to go up, which is only going to make it tougher on our economy.  Go ahead. 

SEKOFF:  They had to raise the rates, but they had enough money to lobby to the tune of two million dollars already this year.  And don‘t forget, where is Aetna headquartered?  Connecticut, home of Joe Lieberman, who, again this week, told us that he just can‘t get behind the public option.  If you have a pen, Ed, we can connect the dots. 

SCHULTZ:  Well, they have a pattern of prioritizing premiums over membership.  So I don‘t know how the Republicans would defend this.  Now it would seem to me that in the middle of this debate that‘s going on—the senators are going to work over the weekend—that stories like this would give them all the ammunition they need to close this deal.  What do you think? 

SEKOFF:  You would think so, but I think, you know, the crinkling of the money speaks a little louder in the ears of Joe Lieberman and Blanche Lincoln and Ben Nelson.  This is the problem.  The influence of special interest money, Ed, is just redolent on this issue.  The stink is powerful.

SCHULTZ:  The other night on this program, Barbara Boxer told me I‘m too hard on the Democrats.  They‘re going to get a public option.  Then I listen to Ben Nelson.  I listen to Joe Lieberman, Blanche Lincoln, they‘re not going to show up for a public plan.  If you had to call it right now, what‘s the call? 

SEKOFF:  I‘m getting terrified.  When you have Dick Durbin, who is a progressive member of the Senate, saying, you know, we still haven‘t gotten rid of the trigger option.  We‘re still looking at that, because maybe we have to bring Olympia Snowe back in.  That‘s when I start biting my nails and getting nervous. 

SCHULTZ:  So what should the progressive movement do with conservative Democrats that won‘t line up?  Is it worth getting together and trying to take them out with a better candidate, and look at this as a generational effort? 

SEKOFF:  I think you have to.  I mean, that‘s what we saw.  Throughout the course of this, Ed, they‘ve been wanting to quit on the public option again and again and again.  The only thing that kept it going was the public, the grassroots keeping the pressure on.  That‘s why Harry Reid was ready to give it up and then he came back into the fold.  That‘s why Barack Obama was ready to give it up and he slowly has come back, although not with the kind of force that we have needed him to do it in. 

SCHULTZ:  Roy, good to have you on.  Keep up the fight, my friend.  You are one of the good guys out there.  We can always count on you to get after it.  Thank you. 

SEKOFF:  Thanks, man. 

SCHULTZ:  Coming up, what a weird week it‘s been.  Tiger got clubbed.  The White House turned into a reality show.  Now, I would think that Lizz Winstead would really have something to say about that.  That‘s coming up on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back.  It‘s Friday, time for Club Ed.  Lizz Winstead, co-creator of “The Daily Show,” the brains behind “Wake-Up World.”  You can check up Lizz‘s “Wake-Up World” Christmas show on December 8th.  Before we get into our material, is it going to be a great show? 

LIZZ WINSTEAD, “WAKE UP WORLD”:  It‘s fun.  If you hate morning shows as much as I do, and you would like to see a satire of them, Tuesday in New York City. 

SCHULTZ:  You‘re going to have, like, eight people talking at once. 

Is that what it is? 

WINSTEAD:  Yes, we‘re just going to have eight people talking at once. 

SCHULTZ:  All right.  Now, this has been a crazy week.  Sarah Palin back in the news.  What‘s happening? 

WINSTEAD:  You know, Ed, I woke up today in a mood and I‘m still in a mood.  Here‘s what I think: would somebody just dump water on her head to see if she melts, finally?  Really, she‘s just—it‘s setting at this point—with the Obama birth certificate.  I think if you actually got close up to her and just went—ripped the mask off, Orly Taitz would be underneath.  I think we should see where the hell is her birth certificate?  I‘ve never seen them together.  I think they‘re the same person. 

SCHULTZ:  How smart is Sarah Palin? 

WINSTEAD:  On a scale of—compared to what?  Like—

SCHULTZ:  I‘m just asking. 

WINSTEAD:  Two headed fish or—

SCHULTZ:  I‘m asking straight up.  There‘s been so much material out there.  I‘m just curious what you think. 

WINSTEAD:  Here‘s what I don‘t get: you kind of are as smart as the people who follow you.  And since nobody can really identify a policy to with which you would want to adhere yourself to, they just keep saying I like her because she likes freedom.  She loves America.  We all love America.  We live here.  It‘s like saying, I like her because she cleans her house.  We all do.  She showers.  She probably is against cancer, too. 

SCHULTZ:  All right, the jobless numbers.  Good numbers out now.  It‘s getting a little better.  What do you think? 

WINSTEAD:  Yes, that 11,000 number was good, although I would have taken 11,001 if Bernanke would have been included in that number. 

SCHULTZ:  How about the party crashers?  They‘ve gotten a lot of pub this week. 

WINSTEAD:  They just—they‘re just blood thirsty media whores.  I can‘t really take it anymore.  I see these party crashers and I think they have the audacity to say they‘re not going to testify before Congress.  I think part of that reason was that they found out you don‘t get paid to testify before congress.  You know, as a comedy writer who every time one of these reality shows is on TV, there‘s about 12 writers who are out of work—when I see her twirling about with her talentless hackery, it makes me want to pour water on her also to see if maybe she will melt. 

SCHULTZ:  Lizz Winstead, quickly, Tiger Woods. 

WINSTEAD:  Yeah, That‘s fun.  You know what?  A sex scandal with boring sexting is not a sex scandal.  He‘s even boring when he has—you know, I don‘t care.  Get rid of him.  Like, I could—really couldn‘t care less.  Unless the texts are awesome and sexy, shut up.  Just—

SCHULTZ:  All right, Lizz, have a good one.  Thanks for joining us tonight. 

Tonight I asked the audience do you think President Obama will lower the unemployment, get it under 10 percent in 2010?  Very confident crowd tonight; 88 percent of you said yes; 12 percent said no.  That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information on THE ED SHOW, go to Ed.Msnbc.Com, radio website, WeGotEd.com.  “HARDBALL” is next with Chris Matthews.  Have a great weekend.  We‘ll see you Monday.

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